Why is the World Angry About the US Farm Bill?

by Hal Hamilton

— September 19, 2002 —

Editorials and proclamations around the world express dismay about the 2002 U.S. farm bill. Media releases from the world summit in Johannesburg were full of criticisms by people in the developing world.

They blame us for hypocritically touting free trade while we subsidize exports that are dumped in their markets. Their local farmers are pushed out of business because they can’t compete at prices less than it costs anyone to produce. Our farmers get government subsidies to survive, but their governments can’t afford the same subsidies.

The whole system of farming for export markets is out of control. It’s not really anyone’s fault, however, although some benefit a lot more than others.

Farmers who produce bulk commodities like corn, soybeans, wheat, and cotton are caught up in a productivity treadmill, growing ever more in order to survive. The companies that buy from these farmers have to move ever more products in order to survive. Members of Congress feel as though they have to keep spending billions in order to not lose more farmers.

An Illinois farmer recently described the keys to his economic survival as “John Deere and Roundup.” He went on to explain that new technology enables him to farm more and more acres every year. He isn’t making more net income, however, just staying barely above water.

Each farmer who doubles his acreage requires another farmer to quit. Each huge hog operation, fueled by cheap corn, requires that a lot of smaller hog producers quit. Every time we further separate livestock from crops, we use more non-renewable fertilizer for the crops and pile up manure where it becomes a pollution source. So the “dead zone” in the Gulf of Mexico keeps growing.

When U.S. taxpayers pay for a large part of farm income, enabling commodities to enter the world market for less than the costs of their production, farmers and poor countries around the world can’t compete and lose their economic base in their own countrysides.

How on earth did everyone get so caught up in a system that nobody really wants and that angers our friends around the world?

The system of commodity production is really successful at producing a lot, but it’s not self-regulating. Low prices or high prices, farmers keep investing in new technology to produce more. More than we need, actually.

This moment in history is the culmination of a few hundred years of chasing productivity. Ever since the beginning of market economies, people have assumed that a healthy economy is the foundation of a healthy society. We assume that we have to have jobs and plenty of goods before we can address the other problems, like environmental degradation or poverty.

It might be, however, that we are in a new phase. Our agriculture, along with a lot of other industries, is more productive than we would have imagined possible. We still need more productivity as our population grows, but we have to be careful that productivity now is not at the expense of productivity later, that we don’t degrade soil or water for example. And because of periodic surpluses of farm commodities, we have the luxury, maybe even the necessity, of thinking about what else we want from agriculture.

How could we keep our wonderful productivity and avoid all the problems of surpluses, subsidies, and environmental costs? We’d have to balance supply with demand and re-create reserves to soak up surpluses and buffer against bad years. We’d also need to make sure that real costs of production are taken into account; for example, it might make sense to create incentives for livestock to come back into crop farms; this would reduce fertilizer needs, solve manure pollution problems, and support soil-conserving rotations.

We’d also support processing and marketing opportunities for a more localized agriculture so that an increasing number of farmers could benefit from specialty markets. New England dairy farmers, for example, would have more opportunities to get premiums from the marketplace if local processors could better capitalize on consumer loyalty and perceptions of quality from local production. Much of our economy is stuck in a mass-market paradigm, but many consumers want food that is better than mass produced.

These solutions are really not all that difficult. The biggest obstacle is the way we think about success of agriculture, defining progress solely as productivity. If we thought more about progress as including development in poor countries, regionally distinct food, clean water, and farm communities with opportunities for young people, we’d make a lot better choices.

When we send our kids to school, we want them to be more than good students or good athletes. We want both. We also want them to have friends. We want them to be well rounded. If we designed an education system that produced only smart kids, or only kids who could run fast, or only kids who had good friendships, we’d think about how to redesign schools to meet the other goals.

Agriculture is no different. We’re getting a lot of productivity, but we’re not doing a good job with stewardship, incomes for family farmers, or development in poor countries. We need to add a few incentives and rules to get what we want. We’d also have more friends around the world if we quit dumping subsidized commodities on them.

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